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The art and science of the possible

~ A celebration of non-zero sum thinking

The art and science of the possible

Tag Archives: Economy

What does an “innovation economy” really mean?

22 Friday May 2015

Posted by lnedelescu in human capital, innovation, management, Organizational Development, society

≈ 1 Comment

Tags

Agile, Economy, Independent judgement, Innovation, Knowledge Economy, Knowledge worker

Prosperity

We have entered the knowledge economy, but are only dismally realizing its tremendous potential for accelerating human progress and prosperity. While we acknowledge human talent as the chief resource of the 21st century, we fail to utilize the creative potential for a majority of the workforce. In fact, the portion of the employed workforce which utilizes independent judgement has remained stagnant for decades [see Nilofer Merchant]. Regarded from this angle, our state of the art economy is only marginally efficient at turning knowledge into innovation.  Progress is only achieved painstakingly and convolutedly. The lost opportunity cost is tremendous [see David Nordfords].

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Your boss, the middleman – Part II

20 Thursday Feb 2014

Posted by lnedelescu in business, human capital, management, Organizational Development, problem solving

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Boss, Business Talent Group, Charles Handy, Economy, Elephants, Fleas, Freelance, hierarchy, management, Middlemen, Roger Martin, Talent

Image

I ended my initial post on this topic with a pointer to the so-called “freelance economy”. In this post I want to take this thread further, as I think it can shed light into the future of employment.

What I was implying at the end of my initial post is that reducing or even doing away with “middleman” corporate hierarchies in a post-materialistic, fluid economy of ideas doesn’t lead to anarchy. Rather it logically leads to a “freelance economy”, a world where, in British management philosopher Charles Handy’s words, free-floating freelancer “fleas” service multiple corporate “elephants” following the need for their specific talents.

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Our creativity liquidity crisis

17 Monday Feb 2014

Posted by lnedelescu in capitalism, human capital, problem solving, society, taxonomy

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creativity, Currency, Economy, George Gilder, Harvard Business Review, Knowledge, Liquidity, Money, Peter Drucker, Roger Martin

Image

The road from the Renaissance to the iPhone might have taken much longer had the world not invented modern banking and finance. Money, an abstraction of value, is indeed a necessary precursor to globalization. It is also the source of systemic crises when the abstraction loses touch with the underlying value as when sophisticated financial instruments become self-referential.

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The fear economy

10 Tuesday Sep 2013

Posted by lnedelescu in business, human capital, Organizational Development, society

≈ 3 Comments

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Economy, Fear, Livelihood, Middle Ages, Middle Class, Organisational Psychology, Talent

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We hail the successes of the knowledge economy to improving the human livelihood, but in fact, the psychology of the typical workplace is not much different than it must have been in the middle ages. From a psychological perspective, I am comfortable claiming that we have yet to move beyond what I would call the “fear economy”.

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Humanity’s cosmic connection: from physics to economics

03 Sunday Mar 2013

Posted by lnedelescu in complexity, science, society

≈ 2 Comments

Tags

Economy, inspiring, Nature, philosophy, science, Society

supernova_3

First, there was the universe. And then came humans. We study the universe sometimes forgetting we are the universe. There are lots of pointers to our cosmic connections. I am not referring to the documentaries on National Geographic where Michio Kaku, the celebrity physicist, tells us that every atom in our body was forged in supernovae that exploded a long time ago. Rather, in this blog I will be exploring a more more fundamental connection, between the least understood laws of the universe we’ve so far uncovered and a basic social human activity, between quantum mechanics and economics.

Why even explore such connections? Because similarities across sciences may have profound philosophical implications. We have to remember that dividing the observed reality into various sciences is a human construct meant to make things easier to deal with for us. The universe was not set up that way. So, every opportunity for common insights across sciences should be taken seriously, as it might shed light into our very nature and purpose.

Quantum mechanics had profound philosophical implications since the moment its laws were discovered in the earlier 20th century. It basically implied that the universe is unpredictable, that there is a fundamental limit to what humans can determine. Until then, Newtonian physics promised determinism, since, if one could measure the motion of all atoms, one could even predict the future, which becomes but the sum of all motions. But quantum mechanics, still beyond the grasp of human logic, says that there is a yet unexplained connection between the observer and experiment. Somehow the observer cannot be separated from experiment, and so, past some microscopic scale, the very process of observation changes the experiment, so that we can never determine exactly the initial state of a given situation.

As interesting as the implications of quantum mechanics might be, the general consensus was the microscopic scales don’t apply in the macroscopic world of humans.

But in economics a similar principle proposing a link between observer and experiment has been proposed. A number of cyberneticicians in the 1970s challenged the classical economic theory proposing that markets tend to equilibrium. They instead proposed that classical economic theory is based on the observer being clearly separated from the experiment. But if the observer is also part of the economic “game”, there is a limit to what we can predict about future outcomes reminiscent of quantum mechanics. The observer being embedded in the experiment is deemed in cybernetic theory as “reflexivity”. It’s as if cause and effect are not sequential, but rather they affect each other simultaneously  Gives one a headache just thinking about it.

So the question then becomes, how could the micro and macro worlds share characteristics? What is the connection? Well, social systems are made of people. And people act according to a computing device called “the brain”. And the brain is made of neurons which transmit electrical signals, i.e. exchange electrons. And electrons are small enough to be influenced by quantum laws. If the brain has the characteristics of a quantum computing device, this might explain why human behavior in inherently unpredictable and why, systems that include many humans, are even less predictable. While this reality may really piss off statisticians, it is otherwise a good thing: it says that humans have free will, are creative beings that can design their own future. But those insisting on predictions and reading into coffee cups shouldn’t get completely depressed. There is a way to predict the future: design it! 🙂

A few thoughts on humanity’s future

18 Monday Feb 2013

Posted by lnedelescu in future, philosophy, society

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Capitalism, Consumerism, creativity, democracy, Economy, future, human, Nature, philosophy, politics, Society

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“Imagination is more important than knowledge. Knowledge is limited. Imagination encircles the world” is a well known quote of Albert Einstein. The insights one can derive from Einstein’s wisdom are powerful enough to shed light into humanity’s future.

But before jumping to the future, let’s take a step back and attempt to frame, in general terms, humanity’s current state. The multiparty democratic construct supported by a free market economy was challenged in the last hundred years by at least two competing totalitarian ideologies and thankfully, it has been reaffirmed as the best model for human organization we know. So Winston Churchill was probably right when he declared in 1947 that “democracy is the worst form of government except for all those others that have been tried”. Diversity and competition, two mechanisms that served the natural world so well, appear to be the most viable means by which social systems can also evolve. But social systems are different than natural systems. Besides diversity and competition, social systems also include compassion. And so, the modern democratic construct is itself polarized around two dominant ideologies, which are more aligned with either compassion or competition. So far so good. Now let’s take a closer look at the competitive mechanism.

An opportunity usually arises when a competitive advantage is created. And a competitive advantage can itself come in two flavors. First, it can come from exploiting a physical or knowledge differential (I have access to a physical or knowledge resource that you need). But physical resources are limited, and, if we believe Einstein, so is knowledge. So, as long as it competes primarily in the physical and knowledge domains, humanity is playing a zero sum game. Enter the Internet age with all the related technologies and barriers to physical and knowledge resources are rapidly dissolving. That means that competitive advantages based on limited resources will become increasingly harder to exploit and defend. Which brings me to the second flavor of competitive advantages, those derived from an unlimited resource: creativity.

Creativity is one of the most unique, and arguably most beautiful facets of the human condition. Its sources are curiosity and passion, human characteristics which are hard to incentivize. Material compensation and reward will not necessarily increase curiosity or passion. Curiosity can be instilled and nurtured, but not bought or coerced.

And so, in my opinion, humanity’s future is predicated on a competitive construct based on an unlimited resource: creativity. This is the next step beyond the so called “knowledge economy”. This type of competitive construct is also in alignment with the best that human nature has to offer; curiosity, passion, dedication, are all positivist sentiments in alignment with compassion, trust and respect. This evolution does present significant challenges to the current bi-polar democratic construct that poises compassion against competition. Consumerism, a key component of the economic engine on which the current democratic construct’s viability depends, is primarily based on limited resources; it will also have to evolve to where humanity becomes a primary consumer of ideas, truth and beauty.

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business capitalism Communication complexity consulting Crisis democracy design thinking Emerging Markets future human capital innovation Investment knowledge learning management Organizational Development paradox philosophy problem solving sales science society strategy taxonomy technology Uncategorized

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